Potential impacts of the Mercosur-EU agreement on the automotive value chains in Brazil and Argentina

Dulcich, Federico

doi:10.1590/1982-3533.2023v32n1art06

Acessibilidade / Reportar erro

Brasil

Español English

sumário « anterior atual seguinte »

Sumário

Original articles • Econ, Soc. 32 (1) • Jan-Apr 2023 • https://doi.org/10.1590/1982-3533.2023v32n1art06 copy

Potential impacts of the Mercosur-EU agreement on the automotive value chains in Brazil and Argentina

Impactos potenciais do Acordo Mercosul-União Europeia

Authorship SCIMAGO INSTITUTIONS RANKINGS

Abstract

This paper investigates the potential effects of the Mercosur-EU agreement for the automotive value chains in Argentina and Brazil, identifying the trade balance movements of each partner. Its main results point to an improved trade balance in most automotive and auto parts products for the EU. Besides differences in international competitiveness, other factors prompt these results, such as differences in production scale between partners, greater tariff preferences granted by Mercosur, greater potential demand for vehicles in Argentina and Brazil than in the EU, higher regulation requirements on product and process quality in the EU market, among others.

Keywords
Automotive value chain; Free trade agreement; European Union; Mercosur

Economic Sector	Variable		Argentina	Brazil	EU 28	Germany	France	Italy	Spain	Czech Republic	Hungary
Automotive Industry	Vehicle production (units) (year 2018)		466.649	2.879.809	19.205.095	5.642.732	2.269.600	1.060.068	2.819.565	1.345.041	430.988
		Automobiles (% of total)	45%	85%	86%	91%	78%	63%	80%	100%	100%
		Pickups and utility pehicles (% of total)	55%	12%	11%	6%	22%	31%	18%	0%	0%
		Others (% of total)	0%	5%	3%	3%	0%	6%	2%	0%	0%
	Vehicle production per 1000 inhabitants (units) (year 2018)		10	14	43	68	34	18	60	127	44
	Imports / Consumption (units) (year 2018) ⁽¹⁾ (1) Note: In European countries, this variable includes intra-EU28 trade. At the same time, in Argentina and Brazil it includes intra-MERCOSUR trade.		76%	9%	24%	86%	n.d.	96%	90%	n.d.	n.d.
	Exports / Production (units) (year 2018) ⁽¹⁾ (1) Note: In European countries, this variable includes intra-EU28 trade. At the same time, in Argentina and Brazil it includes intra-MERCOSUR trade.		39%	22%	32%	92%	n.d.	93%	82%	n.d.	n.d.
	Trade balance (USD million) (year 2018) ⁽¹⁾ (1) Note: In European countries, this variable includes intra-EU28 trade. At the same time, in Argentina and Brazil it includes intra-MERCOSUR trade. ⁽²⁾ (2) Note: Includes buses and coaches (HS02 8702), automobiles (HS02 8703), and motor vehicles for the transport of goods (HS02 8704).		-2.525	607	100.368	97.752	-12.841	-14.066	17.425	18.321	6.620
Auto parts Industry	Trade balance (USD million) (year 2018) ⁽¹⁾ (1) Note: In European countries, this variable includes intra-EU28 trade. At the same time, in Argentina and Brazil it includes intra-MERCOSUR trade. ⁽³⁾ (3) Note: Includes transmission belts (HS02 4010), new tires (HS02 4011), gasoline engines (HS02 8407), diesel engines (HS02 8408), engine parts (HS02 8409), drive shafts (HS02 8483) , electric accumulators (HS02 850710) and other auto parts (bumpers, safety seat belts, brakes, gearboxes, shock absorbers, radiators, clutches, steering wheels, exhaust pipes, etc; belonging to HS02 8708		-3.851	-3.825	48.811	40.598	-2.315	9.605	-6.423	3.983	5.955
Auto parts Industry	Average imports of auto parts per produced vehicle (year 2018) ⁽¹⁾ (1) Note: In European countries, this variable includes intra-EU28 trade. At the same time, in Argentina and Brazil it includes intra-MERCOSUR trade. ⁽³⁾ (3) Note: Includes transmission belts (HS02 4010), new tires (HS02 4011), gasoline engines (HS02 8407), diesel engines (HS02 8408), engine parts (HS02 8409), drive shafts (HS02 8483) , electric accumulators (HS02 850710) and other auto parts (bumpers, safety seat belts, brakes, gearboxes, shock absorbers, radiators, clutches, steering wheels, exhaust pipes, etc; belonging to HS02 8708		10.685	3.501	3.049	13.288	13.487	17.460	9.420	12.733	26.018

Group (Year 2016)	Argentina				Brazil				EU 28				EU 28 / Argentina		EU 28 / Brazil
Group (Year 2016)	Production (Units)	Plants	Production / Plant	Production Share (%)	Production (Units)	Plants	Production / Plant	Production Share (%)	Production (Units)	Plants ^() () Note: The plants that belong to joint ventures of different groups (such as those of Sevel in the case of Fiat and PSA) were considered as one plant in each of them.	Production / Plant	Production Share (%)	Production (Units)	Production / Plant	Production (Units)	Production / Plant
Volkswagen	66.184	1	66.184	14%	324.128	4	81.032	15%	4.944.095	23	214.961	26%	75	3,2	15	2,7
PSA	59.391	1	56.391	13%	85.026	1	85.026	4%	2.130.716	12	177.560	11%	36	3,0	25	2,1
Renault	61.071	1	61.071	13%	208.352	2	104.176	10%	1.774.495	10	177.450	9%	29	2,9	9	1,7
Daimler	1.899	1	1.899	0%	n.d.	n.d.	n.d.	n.d.	1.739.370	8	217.421	9%	916	114,5	n.c.	n.c.
Fiat	35.738	1	35.738	8%	387.715	2	193.858	18%	1.299.188	9	144.354	7%	36	4,0	3,4	0,7
Ford	85.547	1	85.547	18%	219.519	3	73.173	10%	1.111.362	4	277.841	6%	13	3,2	5,1	3,8
Hyundai	0	0	0	0%	161.756	1	161.756	8%	702.461	2	351.231	4%	n.c.	n.c.	4,3	2,2
Nissan	0	0	0	0%	45.490	2	22.745	2%	628.953	3	209.651	3%	n.c.	n.c.	14	9,2
Toyota	97.809	1	97.809	21%	175.901	2	87.951	8%	508.604	4	127.151	3%	5,2	1,3	2,9	1,4
GM	55.003	1	55.003	12%	334.447	3	111.482	16%	191.797	2	95.899	1%	3,5	1,7	0,6	0,9
Honda	12.003	1	12.003	3%	120.585	1	120.585	6%	133.875	1	133.875	1%	11	11,2	1,1	1,1
Others ^() ()** Note: Includes Leyland Trucks, Suzuki and Tata in the EU 28; Navistar in Brazil; BMW, Geely (Volvo), and Paccar (with production in both partners), others not indentified, and errors and omissions.	0	0	0	0%	93.437	5	18.687	4%	3.641.728	83 ^(*) (*) Note: Corresponds to plants belonging to other companies in 2020.	43.876	19%	n.c.	n.c.	39	2,3
Total (Year 2016)	474.645	9	52.738	100%	2.156.356	26	82.937	100%	18.806.644	161	116.811	100%	40	2,2	9	1,4

Year	World		EU 28		Brazil		Argentina
Year	Motorization rate	Sales (units)	Motorization rate	Sales (units)	Motorization rate	Sales (units)	Motorization rate	Sales (units)
2005	137	65.923.794	603	17.719.106	124	1.714.644	180	402.690
2006	141	68.353.376	613	18.039.188	128	1.927.738	183	460.478
2007	144	71.563.399	611	18.353.301	135	2.462.728	195	564.926
2008	147	68.315.495	622	16.900.754	143	2.820.350	211	611.770
2009	149	65.568.829	624	15.802.106	153	3.141.240	221	487.142
2010	153	74.971.523	631	15.174.562	164	3.515.064	248	698.404
2011	157	78.170.420	639	15.123.397	176	3.633.248	266	883.350
2012	161	82.129.138	643	13.806.642	187	3.802.071	275	830.058
2013	165	85.606.136	647	13.604.259	198	3.767.370	295	963.917
2014	170	88.338.098	652	14.466.054	206	3.498.012	313	613.848
2015	175	89.684.608	662	15.885.920	209	2.568.976	318	644.021
2016	n.d.	93.856.388	665	16.993.841	209	2.050.321	324	709.482
2017	n.d.	95.660.606	678	17.347.614	210	2.172.738	320	862.332
2018	n.d.	95.055.937	690	17.472.462	212	2.468.434	317	773.641
2005-2018 linear growth	2,4% ^() ()** Note: Corresponds to 2005-2015 linear growth	3,3%	1,0%	-0,6%	4,8%	1,0%	5,2%	4,5%

HS 2017	Description	2017-2018 average trade balance (U$S millions)						Expected static effect ^() ()** Note:			2017 Average MFN applied import duties (%) ^() () Note: Includes only ad valorem tariffs. The averages are simple average of the tariff lines belonging to each 4-digit classification of the Harmonized System 2017 (HS 2017). If the average MFN applied import duties of Argentina and Brazil differ due to a perforation of the Mercosur common external tariff, a simple average was taken between both values.
HS 2017	Description	Argentina - Brazil	Argentina - World	Brazil - World	EU 28 - World	EU 28 - Argentina	EU 28 - Brazil	Trade balance Argentina - EU 28	Trade balance Brazil - EU 28	Intraregional trade flows Argentina from/to Brazil	Argentina - Brazil (a)	EU 28 (b)	EU 28 differential preferences (c) = (a) - (b)
8701	Tractors	-229	-278	1.369	7.074	29	23	↓	↓	IOS	16	5	12
8702	Public passenger transportation vehicles	-23	-28	198	-604	0	1	?	↑	No effect	33	12	21
8703	Motor cars	-1.699	-2.311	2.332	97.035	414	598	↓	↓	IOS	34	10	24
870421/31	Pickups and light trucks (total weight with maximum load less than or equal to 5 tonnes)	875	1.293	-882	-2.184	17	3	?	↓	?	35	14	21
8704 -Others	Other vehicles for the transport of goods	-187	-216	1.034	7.001	21	6	↓	↓	IOS	29	12	17
8705	Special purpose motor vehicles (e.g. breakdown lorries, road sweeper lorries, etc.)	-2	-36	15	3.448	29	7	↓	↓	IOS	30	4	26
8706	Chassis fitted with engines	-44	-44	624	793	0	21	↓	↓	IOS	28	10	18
8707	Bodies (including cabs) for motor vehicles	-11	-13	248	706	2	35	↓	↓	IOS	30	5	25

HS 2017	Description	2017-2018 average trade balance (U$S millions)						Expected static effect ^() ()** Note: ↑ Argen tin a / Brazil - EU 28 trade balance in creases ↓ Argentina / Brazil - EU 28 trade balance decreases ? Unknown effect IOS Import origin substitution from Brazil to EU 28 DOE Displacement of exports to Brazil by EU 28			2017 Average MFN applied import duties (%) ^() () Note: Includes only ad valorem tariffs. The averages are simple average of the tariff lines belonging to each 4-digit classification of the Harmonized System 2017 (HS 2017). If the average MFN applied import duties of Argentina and Brazil differ due to a perforation of the Mercosur common external tariff, a simple average was taken between both values.
HS 2017	Description	Argentina - Brazil	Argentina - World	Brazil - World	EU 28 - World	EU 28 - Argentina	EU 28 - Brazil	Trade balance Argentina - EU 28	Trade balance Brazil - EU 28	Intraregional trade flows Argentina from/to Brazil	Argentina - Brazil (a)	EU 28 (b)	EU 28 differential preferences (c) = (a) - (b)
4010	Conveyor or transmission belts	-2	-22	-76	658	13	24	↓	↓	IOS	14	7	8
4011	New pneumatic tyres of rubber	-86	-131	218	-1.919	20	31	↓	?	?	15	4	11
8407	Internal combustion engines	-61	-125	-30	4.637	38	120	↓	↓	IOS	14	3	11
8408	Diesel or semi-diesel engines	84	-226	-347	9.146	248	290	↓	↓	DOE	13	3	10
8409	Parts of engines	-26	-142	344	3.407	38	-54	↓	↑	No effect	9	2	6
8483	Transmission shafts, gear boxes and other speed changers	-17	-137	-513	5.503	99	326	↓	↓	IOS	14	4	10
850710	Electric accumulators	-30	-37	80	323	2	6	↓	↓	IOS	18	4	14
870810	Bumpers	-7	-15	-33	711	-2	32	?	↓	?	18	4	14
870821	Safety seat belts	-12	-18	-14	434	6	14	↓	↓	IOS	18	4	14
870829	Parts and accessories of vehicles bodies, other than safety seat belts	-82	-273	-608	4.845	137	467	↓	↓	IOS	15	4	11
870830	Brakes	-62	-95	-122	1.562	33	111	↓	↓	IOS	17	4	13
870840	Gear boxes	85	-154	-1.646	5.654	-6	323	?	↓	?	13	4	9
870850	Drive-axles with differential	-21	-102	-310	1.645	50	173	↓	↓	IOS	13	4	9
870870	Road wheels	-33	-66	-27	-770	14	33	↓	↓	IOS	16	4	12
870880	Suspension systems and parts thereof (including shock-absorbers)	-23	-40	-58	1.060	4	38	↓	↓	IOS	18	4	14
870891	Radiators	-7	-20	-37	159	12	35	↓	↓	IOS	18	4	14
870892	Silencers (mufflers) and exhaust pipes	-2	-11	-47	274	10	26	↓	↓	IOS	18	4	14
870893	Clutches	-17	-30	6	891	16	40	↓	↓	IOS	18	4	14
870894	Steering wheels, steering columns and steering boxes	-21	-72	-229	1.485	50	96	↓	↓	IOS	16	4	12
870895	Safety airbags with inflater system	-12	-29	-164	480	14	43	↓	↓	IOS	10	4	6
870899	Other vehicle parts and accessories	-70	-180	-191	8.145	144	623	↓	↓	IOS	9	4	5

Economic Sector	HS 2017	Description	GERMANY		FRANCE		AUSTRIA		ITALY		SPAIN		CZECHIA		HUNGARY		SLOVAKIA		ROMANIA		EU28 - OTHERS
Economic Sector	HS 2017	Description	Extra - EU28	Intra - EU28	Extra - EU28	Intra - EU28	Extra - EU28	Intra - EU28	Extra - EU28	Intra - EU28	Extra - EU28	Intra - EU28	Extra - EU28	Intra - EU28	Extra - EU28	Intra - EU28	Extra - EU28	Intra - EU28	Extra - EU28	Intra - EU28	Extra - EU28	Intra - EU28
Vehicles and platforms	8701	Tractors	2.530	3.806	573	-140	132	96	462	-445	101	-363	-25	-532	-37	-366	-16	-284	-24	-633	3.381	886
	8702	Public passenger transportation vehicles	47	324	-239	-375	-200	-64	-208	-452	27	-22	14	599	-27	-39	-9	-73	-53	-27	43	234
	8703	Motor cars	67.257	33.271	-1.004	-11.682	1.247	-5.292	3.735	-18.043	886	12.819	3.169	14.500	1.098	4.329	5.406	10.771	459	1.559	14.715	-38.801
	8704	Vehicles for the transport of goods	3.423	1.351	255	556	707	-230	-161	2.237	537	3.054	10	-637	24	-634	5	-157	-116	-454	115	-6.766
	8705	Special purpose motor vehicles (e.g. breakdown lorries, road sweeper lorries, etc.)	1.906	1.368	186	-299	194	24	358	562	78	-149	1	-63	20	22	0	-27	-2	-82	701	-550
	8706	Chassis fitted with engines	95	-45	-2	-93	-1	-24	7	-8	63	-122	19	7	0	1	0	-3	-1	-22	611	-251
	8707	Bodies (including cabs) for motor vehicles	680	-86	20	-12	30	-6	42	92	265	-3	232	-106	1	15	74	222	48	-3	-690	-299
Auto parts	4010	Conveyor or transmission belts or belting of vulcanised rubber	370	144	43	-133	7	-27	54	54	6	2	6	-44	16	17	11	-3	7	63	138	14
	4011	New pneumatic tyres of rubber	-76	-1.008	93	-1.117	-40	-586	-448	-259	80	494	336	890	81	879	284	867	273	857	-2.452	-517
	8407	Internal combustion engines	2.507	-1.359	-201	1.061	735	1.357	317	82	534	-1.264	17	-762	160	3.036	-134	-596	203	406	510	-511
	8408	Diesel or semi-diesel engines	3.301	-1.137	312	1.285	391	1.351	1.432	-336	236	-896	-17	-1.385	312	1.629	9	-351	-180	-288	3.351	270
	8409	Parts of engines	2.732	4.231	117	-738	53	-1.099	127	138	-55	-220	97	253	-58	-1.048	-294	-128	22	-120	659	-3.088
	8483	Transmission shafts, gear boxes and other speed changers	3.787	2.931	137	-298	147	-619	486	1.193	395	-296	-32	-131	-84	-605	-64	704	-9	-111	732	-1.762
	850710	Electric accumulators	427	175	34	-502	4	196	0	113	140	372	60	294	7	-26	-3	-69	5	-3	-349	-332
	870810	Bumpers	643	249	6	-81	0	-88	-2	70	6	-123	18	172	12	-40	-5	-135	6	-8	27	-447
	870821	Safety seat belts	356	-622	-12	-57	1	-9	9	-16	-3	-192	-2	274	1	301	-1	-55	58	482	26	-94
	870829	Parts and accessories of vehicles bodies, other than safety seat belts	4.285	-2.741	63	-343	28	-273	153	494	-37	-972	-84	2.212	14	369	-143	-1.949	255	319	309	-3.196
	870830	Brakes	1.175	-159	181	-367	1	-170	229	950	79	217	86	560	6	170	-69	21	103	-119	-231	-424
	870840	Gear boxes	7.374	1.188	-372	137	24	-203	125	41	-214	-1.146	-144	-114	-138	-1	-347	-618	128	910	-485	-3.704
	870850	Drive-axles with differential	1.436	857	103	-84	30	313	214	804	-24	-324	-94	-372	-7	42	-153	-103	108	-97	34	-998
	870870	Road wheels	31	47	-50	-123	-55	129	-103	499	-130	-37	-8	237	47	164	-8	-290	-15	-18	-480	-114
	870880	Suspension systems and parts thereof (including shock-absorbers)	1.044	794	35	-149	-10	-81	10	-201	54	334	49	144	-5	-10	-3	241	20	-27	-136	-321
	870891	Radiators	216	-331	5	56	-74	52	2	-39	-5	53	-6	340	-9	-97	6	188	23	57	1	199
	870892	Silencers (mufflers) and exhaust pipes	295	473	10	-204	-4	173	31	88	11	-49	-39	393	0	-96	-23	-162	10	-32	-16	483
	870893	Clutches	801	858	75	-144	21	-48	0	-96	-2	-16	-12	-42	53	420	-15	279	1	-110	-31	-399
	870894	Steering wheels, steering columns and steering boxes	1.623	-597	-132	524	20	-77	-6	-132	-24	-523	24	100	128	424	-132	-231	53	681	-71	-9
	870895	Safety airbags with inflater system	451	-46	27	18	-24	30	-2	-43	31	-184	1	-124	-16	14	-1	-98	-19	585	32	486
	870899	Other vehicle parts and accessories	2.771	-64	839	-836	37	-237	1.317	1.447	1.568	-4.511	165	696	15	-864	-42	-520	202	-25	1.267	-3.441
Automotive chain - Total			114.871	45.561	1.120	-12.598	3.466	-5.434	7.278	-11.866	3.646	5.618	3.793	17.443	1.602	7.880	4.354	7.463	1.535	3.679	19.868	-62.153

Expected sectoral static effect for Argentina / Brazil				Argentina / Brazil - World
Expected sectoral static effect for Argentina / Brazil				Trade surplus	Trade deficit
EU 28 - World	Trade surplus	EU 28 - Arg/Bra	Trade surplus	^↓ ↓ Argentina / Brazil - EU 28 trade balance decreases	^↓ ↓ Argentina / Brazil - EU 28 trade balance decreases
	Trade surplus	EU 28 - Arg/Bra	Trade deficit	^↑ ↑ Argentina / Brazil - EU 28 trade balance increases	^? ()* Note: Corresponds to plants belonging to other companies in 2020.
	Trade deficit	EU 28 - Arg/Bra	Trade surplus	^? ()* Note: Corresponds to plants belonging to other companies in 2020.	^↓ ↓ Argentina / Brazil - EU 28 trade balance decreases
	Trade deficit	EU 28 - Arg/Bra	Trade deficit	^↑ ↑ Argentina / Brazil - EU 28 trade balance increases	^↑ ↑ Argentina / Brazil - EU 28 trade balance increases

Instituto de Economia da Universidade Estadual de Campinas, Publicações Rua Pitágoras, 353 - CEP 13083-857, Tel.: +55 19 3521-5708 - Campinas - SP - Brazil
E-mail: publicie@unicamp.br

Acompanhe os números deste periódico no seu leitor de RSS

[1] Source: Author's own elaboration based on OICA, ACEA, United Nations, ADEFA, ANFAVEA, ANFAC, ANFIA and World Bank. n.d. = no data.

[TFN01] ⁽¹⁾
Note: In European countries, this variable includes intra-EU28 trade. At the same time, in Argentina and Brazil it includes intra-MERCOSUR trade.

[TFN02] ⁽²⁾
Note: Includes buses and coaches (HS02 8702), automobiles (HS02 8703), and motor vehicles for the transport of goods (HS02 8704).

[TFN03] ⁽³⁾
Note: Includes transmission belts (HS02 4010), new tires (HS02 4011), gasoline engines (HS02 8407), diesel engines (HS02 8408), engine parts (HS02 8409), drive shafts (HS02 8483) , electric accumulators (HS02 850710) and other auto parts (bumpers, safety seat belts, brakes, gearboxes, shock absorbers, radiators, clutches, steering wheels, exhaust pipes, etc; belonging to HS02 8708

Intraregional trade flows Argentina from/to Brazil ^() ()** Note: Corresponds to 2005-2015 linear growth		Trade balance Argentina - EU 28
		↑	↓	?
Trade balance Brazil - EU 28	↑	No effect	No effect (Higher Argentine imports from the EU 28 displace extra-regional suppliers)	No effect
	↓	No effect (Higher Brazilian imports from the EU 28 displace extra-regional suppliers)	Arg-Bra: (X-M) > 0 → DOE Arg-Bra: (X-M) < 0 → IOS	?
	?	No effect	?	?